'Timmy's grandmother set up this trust fund. It was supposed to go to her son. The son died. The next beneficiary was her infant grandson. That's Timmy. There weren't any other relatives, or if there were, Grandma wasn't interested. The D.A. mentioned it in that article. The money goes to charities.'
'It can't be that. Charities aren't generally run by stupid people. They receive bequests all the time, and their counsel are very sophisticated about making sure they get what the benefactor wanted them to. The charity is a corporation, and that's like a person in law. The charity would have four years before the statute time ran. The lawyers would go over the will and the trust papers the day they heard about it.'
'No,' said Jane. 'The trust doesn't go to the charities. Only the money does.'
Karen was silent for the space of an indrawn breath. 'Oh, no,' she said. 'You're telling me the old lady didn't specify the charities?'
'Nobody has ever mentioned any,' said Jane. 'And Dennis - another lawyer who did read the papers - said it was just 'charities.' He was sure they were going to steal the money, but he didn't say how.'
Karen's voice sounded tired, but she spoke quickly, as though she were reading something that was printed inside her eyelids. 'Then I can think of a lot of ways to do it. Here's the simplest. Timmy becomes deceased - either in fact or in law - and they get a death certificate. They then disperse the money to a charity of their choice, or even of their own making, which kicks most of the money back in some way: ghost salaries and services, paid directorships, whatever.'
'Is that the way you would do it?'
Karen's voice was a monotone. 'Thank you very much.'
'You know what I mean. Is it the smartest way? They picked this time to have Timmy declared dead. They could have waited forever. There must be a reason why they did it now.'
'What I just told you is the dumb way. The smartest way is always to stay as close to legality as possible. If they were sole trustee and executor, they could have been draining the fund since it was started. They could set enormous fees, charge all sorts of costs to the trust, and cook the books a little here and there to show losing investments. They wouldn't steal it all. They would leave a substantial sum in there. How much is there?'
'I don't know. I get the impression it's tens of millions, maybe hundreds.'
'Okay. Say it's a hundred million. They could get away with four or five percent a year as trustee and executor. They could also do virtually anything with the principal. There are written guidelines in every state I know of, but they're broad, and they're open to interpretation. They could invest in their friend's chinchilla ranch and have their friend go bankrupt, if nobody knew the connection. If they were smart enough to steal it slowly and vary the investments to make it look inconclusive, they could do a lot.'
'Inconclusive?'
'You know. The trust has lots of stock in fifteen hundred companies, twenty million in federal bonds and a five-million-dollar write-off on the chinchilla ranch, and it's tough to prove they were anything but mistaken on the issue of chinchilla futures. Not dishonest.'
'So then what?'
'They do it a few more times over the years, always making sure that the proportions are right - nine winners, one loser. They're stealing a lot, but some of it is hidden by the fact that most investments are making money. You have to remember that even the good investments go up and down too, so the bad ones are hard to spot. When they've got all they can, they call it quits.'
'How do they call it quits?'
'They fulfill the terms of the trust - that is, they disperse the money to charities. Only now it's not a hundred million. It's twenty million.'
'And nobody notices that eighty million is gone?'
'If the trust doesn't change hands, nobody looks. If you have twenty million, you can create quite a splash in the world of charity. You don't write a twenty-million-dollar check to the United Way and close the books.'
'What do you do?'
'You divide it into ten-thousand-dollar tidbits and dole it out. Now you have two thousand checks from the Agnes Phillips Trust, which nobody ever heard of. Each year, you send four hundred different charities all over the country ten thousand dollars each. That's more than one a day. You do it for five years. The first year, when the Children's Fund of Kankakee gets a check from the Agnes Phillips Trust, what does it do?'
'You've got me.'
'It sends a thank-you note. They're not going to demand an audit of the trust that sent them ten grand. It would never occur to them, and if it did, they couldn't make it stick. They're not heirs named in a will. They're a charity that got a big check at the discretion of the people who sent it. They're grateful. They have no idea of the size of the trust, and they hope they'll get another check next year so they can help more children.'
'So at the end of five years, the money is all gone, and the statute of limitations has run on the eighty million they stole?'
'If they get only five percent return on the money while they dole it out, they get a couple of extra years. What's working most in their favor is that during all that time - figure eight years - nobody is asking any questions. That's the main thing. If at the end of that time there's a full-scale audit, the auditors won't be able to find a single instance of mistaken judgment that isn't at least eight years old, and no theft at all. As long as it's more than four since the payout began, nothing much matters.'
'So what do I do now?'
'I'll tell you one thing I'd do. I'd make sure Timothy Phillips isn't alone much. None of this works if the heir is alive.'
10
Jane went to the pay telephone at a market a few miles from her house, dialed Los Angeles Information to get the number of the Superior Court in Van Nuys, then asked to be transferred to Judge Kramer's office. It was still early in the morning in California and Judge Kramer's secretary sounded irritable and sleepy. 'Judge Kramer's chambers.'
Jane said, 'Could you please tell him it's Colleen?' The last name he had given her had slipped her mind.
'One moment. I'll see if he can be disturbed.'
The name came back to her. 'Mahoney.'
'Pardon me?'
'Colleen Mahoney.'
Jane's mind could see the secretary pushing the hold button, walking to the big oak door, giving a perfunctory knock, and walking into the dim room with the horizontal blinds. She allowed a few seconds for the secretary to tell him, but before she expected him to remember and pick up, he was on the line. 'Judge Kramer.'
'Hello, Judge,' she said. 'Remember me?'
'Yes. This is an unexpected pleasure,' he said. 'At least I hope it is.'
'I found out something that you need to know.'
'What is it?'
'Well, I read that the D.A. has taken a look at Timmy's trust and said Hoffen-Bayne couldn't be anything but honest. He missed something.'
'What did he miss?'
Jane spoke with a quiet urgency. 'If Timmy was dead, the trust was to go to charities, so the D.A. assumed everything had to be okay. But in the trust Grandma didn't say, 'If Timmy dies, dissolve the trust right away and divide its assets among the following charities,' or 'Let the trust continue forever and the income go to the following charities.' She simply said, 'Give it away.' So there was no specific organization named in the trust who could demand the right to see the books.'
'You're saying that someone at Hoffen-Bayne planned to plunder the trust fund, give the residue to charities, and nobody would be the wiser?' he asked. 'I don't see how they could imagine they would get away with it.'
'A lawyer friend of mine thinks it would have worked fine if Timmy hadn't turned up. If there are no heirs, there's nobody with the right to demand an audit.'
'Except the state of California.'
'Let me ask you this. When the grandmother died, wouldn't the trust have either gone through probate or been declared exempt?'
